Boart slashes earnings guidance

Boart Longyear, the world’s largest drilling company, has slashed its 2012 earnings forecast for the second time in three months.

In a statement today the company said it expected earnings to fall 10 to 13 per cent because savings from staff layoffs were yet to materialise.

But Boart said its revenue was still on track to hit $1.9 billion, and savings were still expected to flow through once it reduced its workforce.

"Revenues are broadly consistent with expectations, but margins in drilling services have been impacted due to timing of cost take-outs associated with headcount reductions," the company said.

“Margins are expected to recover as those employees come off the payroll.”

The company said earnings before interest, tax, depreciation and amortisation were expected to fall to between $310 million and $320 million, down from $356 million last year.

Boart Longyear chairman and acting CEO David McLemore said he planned to cut around 20 per cent of the company’s costs and early contract negotiations indicated drilling demand in 2013 was expected to match the levels seen in late 2012.

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